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Massachusetts

Massachusetts

Incentives/Policies for Renewables & Efficiency

Printable Version
Renewable Portfolio Standard   

Last DSIRE Review: 04/17/2013
Program Overview:
State: Massachusetts
Incentive Type: Renewables Portfolio Standard
Eligible Renewable/Other Technologies: Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Municipal Solid Waste, Anaerobic Digestion, Small Hydroelectric, Tidal Energy, Wave Energy, Ocean Thermal, Renewable Fuels, Fuel Cells using Renewable Fuels
Applicable Sectors: Investor-Owned Utility, Retail Supplier
Standard:Class I (New Resources): 15% of by 2020 and an additional 1% each year thereafter
Class II (Existing Resources): 7.1% in 2009 and thereafter (3.6% renewables and 3.5% waste-to-energy)
Technology Minimum:In-state PV: Mandated Target of 400 MW
Credit Trading:Yes (NEPOOL-GIS)
Web Site: http://www.mass.gov/energy/rps
Authority 1:
Date Enacted:
Date Effective:
Expiration Date:
M.G.L. ch. 25A, ยง 11F
11/25/1997
4/2002
Not specified
Authority 2:
Date Enacted:
Date Effective:
225 CMR 14.00
12/20/2010 (subsequently amended)
01/07/2011
Authority 3:
Date Effective:
225 CMR 15.00
06/12/2009
Authority 4:
Date Enacted:
S.B. 2395 (Session Law Chapter 209)
08/03/2012
Authority 5:
Date Enacted:
Order Adopting Timetable for Long-Term Contracts, (Docket 13-57)
03/29/2013
Summary:

NOTE: In February 2013, the Massachusetts Department of Energy Resources (DOER) issued proposed changes to its RPS Class I and RPS Solar Carve-Out programs. The DOER accepted comments through March 25, 2013. In addition, the DOER has developed a draft Assurance of Qualification Guideline and an emergency regulation to provide clarity to the queuing and review process as Solar Carve-Out cap is approached. All drafts, comments, and comment submission information is available on the DOER web site

Under the Class I Renewable Portfolio Standard, all retail electricity suppliers must provide a minimum percentage of kilowatt-hours (kWh) sales to end-use customers in Massachusetts from eligible renewable energy resources installed after December 31, 1997, according to the following schedule:

  • 1.0% of sales by 12/31/2003
  • 1.5% of sales by 12/31/2004
  • 2.0% of sales by 12/31/2005
  • 2.5% of sales by 12/31/2006
  • 3.0% of sales by 12/31/2007
  • 3.5% of sales by 12/31/2008
  • 4.0% of sales by 12/31/2009
  • 5.0% of sales by 12/31/2010 *
  • 6.0% of sales by 12/31/2011
  • 7.0% of sales by 12/31/2012
  • 8.0% of sales by 12/31/2013
  • 9.0% of sales by 12/31/2014
  • 10.0% of sales by 12/31/2015
  • 11.0% of sales by 12/31/2016
  • 12.0% of sales by 12/31/2017
  • 13.0% of sales by 12/31/2018
  • 14.0% of sales by 12/31/2019
  • 15.0% of sales by 12/31/2020, and an additional 1% of sales each year thereafter, with no stated expiration date

Eligible Class I resources include: photovoltaics (PV); solar thermal-electric energy; wind energy; ocean thermal, wave or tidal energy; fuel cells utilizing renewable fuels; landfill gas; energy generated by certain new hydroelectric facilities, or certain incremental new energy from increased capacity or efficiency improvements at existing hydroelectric facilities; low-emission advanced biomass power conversion technologies using fuels such as wood, by-products or waste from agricultural crops, food or vegetative material, energy crops, algae, biogas, liquid biofuels;** marine or hydrokinetic energy; and geothermal energy.

Starting in 2010, retail suppliers must provide a portion of the required renewable energy under the Class I Standard from qualified in-state, interconnected solar facilities. The DOER carried out a stakeholder process that began during second quarter of 2009 to determine the details of this requirement, called the Class I Solar Carve-Out. Final regulations were issued December 2010.

Qualifying solar facilities (officially known as “Solar Carve-Out Renewable Generation Units” in the regulations) must be 6 MW (direct current DC) or less, and must have become operational after December 31, 2007. Facilities that received funding prior to January 1, 2010 from the Massachusetts Renewable Energy Trust or more than 67% funding from the American Recovery and Reinvestment Act (except the federal grant in lieu of tax credit) are ineligible. The Solar Carve-Out Minimum Standard for compliance year 2012 is 0.163%. The Solar Carve-Out Minimum Standard for compliance year 2013 is 0.2744%.***  The Solar Minimum Standard is calculated by dividing the annual solar compliance obligation in megawatt hours (MWh) by the total RPS load obligation from the previous two years. The solar compliance obligation in turn is based on the difference in the SRECs generated during the past two years (see the DOER regulations for calculations and additional guidance). When 400 MW (DC) of qualifying solar facilities have been installed, no additional solar facilities will be qualified for the Solar Carve-Out, although they would be eligible to qualify as a RPS Class I Renewable facility and continue to satisfy the overall Class I Standard.

The DOER has established the qualification process for RPS Class I Renewable and Solar Carve-Out Renewable Generation Facilities in its regulations and provides forms and instructions on its website. The DOER will issue the Statement of Qualification (SQ) and once issued, the developer has four years to put the generation facility into operation. The regulations allow DOER to grant extensions, however the petitioner must submit a new SQ application. No SQ will be issued for Solar Carve-Out projects until all applicable permits are secured.

The Class II RPS requires all retail electricity suppliers to provide annually 3.6% of kWh sales to end-use customers in Massachusetts from Class II renewables, starting in 2009. Eligible Class II renewables include systems operating before December 31, 1997, that generate electricity using PV; solar thermal-electric energy; wind energy; ocean thermal, wave or tidal energy; fuel cells utilizing renewable fuels; landfill gas; energy generated by certain existing hydroelectric facilities up to 7.5 megawatts (MW) in capacity; low-emission advanced biomass power conversion technologies using fuels such as wood, by-products or waste from agricultural crops, food or vegetative waste, energy crops, biogas, liquid biofuels; marine or hydrokinetic energy; or geothermal energy.  In August 2012, DOER has temporarily stopped considering woody biomass as a Class II eligible resource until a rulemaking is completed. The rulemaking is to consider the provisions from the Class I regulations relating to protecting forests and reducing greenhouse gas emissions.

In addition, there is a separate Class II Waste Energy Minimum Standard that requires all retail electricity suppliers to provide annually 3.5% of kWh sales to end-use customers in Massachusetts from waste energy**** starting in 2009. Eligible waste energy generation units must have and maintain a state approved recycling program, must comply with Massachusetts Department of Environmental Protection’s air pollution and solid waste management regulations, and must allocate at least 50% of any revenue received from the sale of renewable energy certificates generated to its recycling programs.

Retail electricity suppliers demonstrate compliance by submitting, in an annual compliance filing to the DOER, documentation that Class I Renewable Energy Certificates (RECs), Solar Carve-Out Generation Certificates (SRECs) Class II RECs, and Class II Waste Energy Certificates have been secured.***** These certificates represent the environmental attributes of one megawatt-hour (MWh) of generation from an eligible facility under each class category. In order to facilitate a robust SREC market, that not only responds to market conditions but also provides price support, the DOER has created the Solar Credit Clearinghouse program.

Retail suppliers may pay the alternative compliance payment (ACP) if they are unable to procure enough renewable energy attributes, however the ACP rates are designed to be higher than the market price of RECs and SRECs. The DOER determined the initial ACP rate for each resource category. The ACP for Class I, Class II, and Class II Waste Energy increase (or decrease) annually based on the Consumer Price Index of the previous year. The Solar ACP will decrease only if DOER determines it is needed based on market conditions; they will not reduce it more than 10% in any given year. The Solar ACP was amended in December 2011 and now follows a 10-year schedule (final rules pending).  See the DOER's Solar ACP 10-year Schedule for details. The following table provides the base year ACP rate and current ACP rates:

Alternative Compliance Payment Rates
Year Class I Class II Class II Waste Energy Solar Carve-Out
Base Year: Initial Rate/MWh 2003: $50.00 2009: $25.00 2009: $10.00 2010: $600.00
2009 Rate/MWh $60.92 $25.00 $10.00 n/a
2010 Rate/MWh $60.93 $25.00 $10.00 $600.00
2011 Rate/MWh $62.13 $25.50 $10.20 $550.00
2012 Rate/MWh $64.02 $26.28 $10.51 $550.00
2013 Rate/MWh $65.27 $26.79 $10.72 $550.00


Massachusetts RPS compliance reports are available on the DOER website.

The MA DOER and the MA Department of Environmental Protection announced a new joint initiative in November 2011, Clean Energy Results Program. This program has several specific renewable energy goals, including by 2020 achieve 50 MW of new solar PV on landfills and brownfields, and support installation of at least three anaerobic digestors and/or CHP projects by 2014 with private partners, among others.

The Green Communities Act (S.B.2768) also requires that electric distribution companies solicit long-term contracts (defined as 10-15 years) for renewable energy (electricity, RECs, or both) two times between July 1, 2009 and December 31, 2012. Originally, the legislation required the renewable energy to be from within Massachusetts, however, in June 2010 the Department of Public Utilities issued emergency regulations (220 C.M.R. 17.00 Emergency) striking the in-state requirement, thereby allowing out-of-state renewable energy resources to submit bids. Massachusetts Department of Energy Resources issued the RFP in September 2010; bids were due in October and contracts will be submitted for approval in March 2011.  Legislation passed in August 2012 amended the long-term contracting provisions, and an order released in March 2013 approved a timetable for two solicitations between January 1, 2013 and December 31, 2016.

S.B. 2768 also established the alternative energy portfolio standard (APS), which requires meeting 5% of Massachusetts' electric load with "alternative energy" by 2020. Legislation passed in August 2012 requires that the state's executive office of energy and environmental affairs study adding technologies that generate "useful thermal energy" to the list of eligible technologies under this standard. That study will be completed by the end of December 2012. For more information on the existing standard, see Alternative Energy Portfolio Standard.

 

* The Solar Carve-Out Minimum Standard was 0.0680% (e) of sales by 12/31/2010. This standard is a portion of the Class I standard, not an addition to the standard.

** In August 2012, the DOER issued the final biomass regulation after more than two years of studying, public input and review. See the "Biomass Policy Regulatory Process" web site for additional, specific information

*** For 2010, the Solar Carve-Out compliance obligation was approximately 30 megawatts (MW) (DC), equivalent to a Solar Carve-Out Minimum Standard of 0.0679%. The Solar Carve-Out compliance obligation for compliance year 2011 was approximately 69 MW, equivalent to a Solar Carve-Out Minimum Standard of 0.1627%. The 2012 Solar Carve-Out compliance obligation is approximately 71 MW.  The 2013 Solar Carve-Out compliance obligation is approximately 118 MW.

**** Waste energy is defined as the electrical energy created from combustion of municipal solid waste.

*****The respective renewable energy certificates (RECs) are issued by the New England Power Pool Generation Information System (NEPOOL-GIS) and are technically called GIS Certificates.

History
Massachusetts' 1997 electric-utility restructuring legislation created the framework for a renewable portfolio standard (RPS). In April 2002, the Massachusetts Department of Energy Resources (DOER) adopted RPS regulations that required all retail electricity providers in the state to utilize new renewable-energy sources for at least 1% of their power supply in 2003, increasing to 4% by 2009. The RPS was significantly expanded by legislation enacted in July 2008 (Green Communities Act S.B. 2768); this legislation established two separate renewable standards -- a standard for “Class I” renewables, and a standard for “Class II” renewables -- as well as an alternative portfolio standard.


 
Contact:
  Howard Bernstein
Massachusetts Department of Energy Resources
100 Cambridge St.
Suite 1020
Boston, MA 02114
Phone: (617) 626-7300 Ext.40155
Fax: (617) 727-0030
E-Mail: doer.rps@state.ma.us
Web Site: http://www.state.ma.us/doer
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2013 - 2014 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.